Credit card after bankruptcy helps to modify credit scores and to acquire financial options. There are many types of credit cards that may be used in the post-bankruptcy phase, although the charges for these cards vary widely. Higher rates are expected because of the bankruptcy and low credit scores.
Among financial services, credit card products are preferred, and a number of banks and other financial companies provide credit cards after bankruptcy.
There are two types of credit cards available after bankruptcy. These are secured and unsecured credit cards. The secured credit cards are offered against a particular savings account that is collateral for the card. The credit limit of these cards depends on the available cash in the account. The unsecured credit cards do not need any collateral. It also charges higher interest rates than the secured credit cards.
Benefits of Credit Card after Bankruptcy
After bankruptcy, a person needs to modify his or her credit score. Credit cards help to modify the score, although unsecured credit cards are not as effective as the secured.
A secured credit card is important after bankruptcy because a transaction through a secured credit card is reported to credit bureaus. Proper use of the card can help the individual in securing good credit scores which are essential for future financial assistance.
Secure credit cards after bankruptcy are considered one of the best financial services. As a result, a number of secured card providers increase their profits by charging higher interest rates and application fees. After bankruptcy, the individual should search for the lowest rates, which may be accomplished through online resources.
Last Updated on : 10th July 2013